3.2. Finance - Accounting

Using this briefing

This briefing is a month-by-month schedule of the major tax (etc) deadlines in the tax year 6 April 2004 to 5 April 2005. It will help you to prepare and send off the main forms in good time — to the Inland Revenue, Customs and Excise, and Companies House.

In a simplified way, the briefing covers:

• Corporation tax, PAYE, self-assessment, VAT, National Insurance contributions (NICs) and Annual Returns.
• The main 'P' forms used by the Inland Revenue for PAYE.
• A list of notable events in the current tax year.
• A summary of the main tax issues for a business at the tax year end and at its financial year end.

Need to know

It is no coincidence that directors with accountancy qualifications are at the top of some of the most successful enterprises. Accountancy is the language of business, and those who do not understand it are at a serious disadvantage.

Whatever your area of expertise, you need to understand the basics of financial management. This will give you an informed view about the company’s performance, and allow you to play a full role in shaping its strategy.

This briefing discusses:

• Profit and loss.
• The balance sheet.
• Cashflow.
• Measuring profitability.
• Budgeting.

Controlling the future

No business can know exactly what the future holds. But budgeting reduces the level of uncertainty, helping you anticipate problems, learn from the past and improve your ability to control the business.

This briefing will help with internal management decisions. People who own shares in the company or other equity providers may also require a budget or forecast to be provided regularly.

It outlines:

• How to forecast the figures you need.
• How to prepare cashflow, profit and loss, and balance sheet budgets.
• How to use your budgets.

This briefing is aimed at smaller limited companies. Companies with an annual turnover of less than £5.6m must file a set of accounts each year, both with the Inland Revenue and with Companies House, but a full audit is not required (this threshold applies to companies with financial years ending on or after 30 March 2004).

When preparing annual accounts, almost all companies use a firm of accountants. As long as you set up a few simple systems, generating the information the accountant needs is relatively simple and inexpensive. It can then be used to review and improve your business operations.

This briefing outlines:

• The basic information needed by your accountant.
• The main problem areas, including stock and payroll.
• How to use the annual accounts process to improve your business.

Running like clockwork

Payroll is a crucial part of your operations. The government requires you to collect tax and National Insurance (NI) under the PAYE system, and imposes penalties for failure.

The many complications include processing statutory sick pay, statutory maternity pay, pension contributions, family tax credit and personal details such as personal loans and student loans. But few employees will tolerate being paid late or incorrectly.

This briefing explains:

• The functions every payroll has to perform.
• How to manage your payroll.
• The pitfalls.
• How to use payroll information to improve your business.

The euro is the single currency shared by 12 of the EU’s 25 member states (see margin note, page 2). Euro notes and coins were introduced on 1 January 2002.

The UK is not currently part of the European single currency. But as the eurozone accounts for over half of the UK’s foreign trade, it has implications for a large number of UK businesses.

This briefing explains:

• Which businesses are affected.
• How companies trading with the eurozone are affected.
• What you can do to adapt to the single currency
• What would happen if the UK joined.